Investing.com - Gold futures rallied to an eight-week high on Friday, after a series of downbeat U.S. economic data dampened speculation the Federal Reserve will begin to taper its bond-buying program as soon as September.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery jumped 1.15% on Friday to settle the week at USD1,376.30 a troy ounce.

Earlier in the session gold prices hit USD1,379.10 a troy ounce, the highest level since June 18.

Gold futures were likely to find support at USD1,304.50 a troy ounce, the low from August 9 and near-term resistance at USD1,391.35, the high from June 17.

Gold prices added 4.55% on the week, the strongest gain since the week ending July 12. The precious metal has rebounded 16% since hitting a 34-month low of USD1,180.15 a troy ounce on June 28.

Gold found support after the University of Michigan said its consumer sentiment index fell from a six-year high of 85.1 in July to 80.0 in August. Economists had expected the index to tick up to 85.5.

Separate reports showed that U.S. housing starts rose less-than-expected in July and building permits also fell short of expectations last month.

Gold traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.

Any improvement in the U.S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the coming months.

An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.

In the week ahead, investors will be looking ahead to Wednesday’s minutes of the Federal Reserve’s most recent meeting, while U.S. data on initial jobless claims and the housing sector will also be closely watched.

Elsewhere on the Comex, silver for September delivery rallied 1.3% on Friday to settle the week at USD23.23 a troy ounce, the strongest level since May 15.

On the week, silver future prices surged 11.7%, the biggest weekly advance since September 2008.

Silver prices are up 24% since hitting a three-year low of USD18.19 on June 28, placing it firmly in bull-market territory.

Meanwhile, copper for September delivery rose 0.75% on Friday to close the week at USD3.362 a pound, the highest since June 5. The red metal gained 1.55% on the week, the second consecutive weekly advance.

The industrial metal was boosted after a raft of upbeat global economic data fuelled hopes for higher demand for the metal.

Investing.com - Gold futures rallied to an eight-week high on Friday, after a series of downbeat U.S. economic data dampened speculation the Federal Reserve will begin to taper its bond-buying program as soon as September.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery jumped 1.15% on Friday to settle the week at USD1,376.30 a troy ounce.

Earlier in the session gold prices hit USD1,379.10 a troy ounce, the highest level since June 18.

Gold futures were likely to find support at USD1,304.50 a troy ounce, the low from August 9 and near-term resistance at USD1,391.35, the high from June 17.

Gold prices added 4.55% on the week, the strongest gain since the week ending July 12. The precious metal has rebounded 16% since hitting a 34-month low of USD1,180.15 a troy ounce on June 28.

Gold found support after the University of Michigan said its consumer sentiment index fell from a six-year high of 85.1 in July to 80.0 in August. Economists had expected the index to tick up to 85.5.

Separate reports showed that U.S. housing starts rose less-than-expected in July and building permits also fell short of expectations last month.

Gold traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.

Any improvement in the U.S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the coming months.

An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.

In the week ahead, investors will be looking ahead to Wednesday’s minutes of the Federal Reserve’s most recent meeting, while U.S. data on initial jobless claims and the housing sector will also be closely watched.

Elsewhere on the Comex, silver for September delivery rallied 1.3% on Friday to settle the week at USD23.23 a troy ounce, the strongest level since May 15.

On the week, silver future prices surged 11.7%, the biggest weekly advance since September 2008.

Silver prices are up 24% since hitting a three-year low of USD18.19 on June 28, placing it firmly in bull-market territory.

Meanwhile, copper for September delivery rose 0.75% on Friday to close the week at USD3.362 a pound, the highest since June 5. The red metal gained 1.55% on the week, the second consecutive weekly advance.

The industrial metal was boosted after a raft of upbeat global economic data fuelled hopes for higher demand for the metal.

Stocks of physical gold crossed continents in the first half of 2013 as Westerners dumped their holdings and, on the other side of the world, the resulting fall in price sent consumers flocking to jewellers and bullion dealers.

Indian, Chinese, Thai and other Asian consumers flocked to jewellers and bullion dealers to build their holdings.

The trend, disclosed n the latest data from the World Gold Council, a trade organisation established by the gold mining industry, highlights the different ways in which gold is viewed and owned around the globe. The figures below show global demand for the metal in tonnes, in the months April-June 2013.

Jewellery demand was up 37pc over the same period in 2012, reaching the highest level since 2008. Bar and coin investment was also up by a huge 78pc year on year. This purchasing was concentrated in China, India and the Middle East, the WGC said - while selling was largely concentrated in western markets.

In the past decade Western investors piled into gold primarily through the medium of "exchange traded funds" or ETFs. These hugely popular vehicles facilitate quick and cheap trading in gold, because physical stocks of the metal - stored in secure vaults typically in London, New York or Switzerland - are linked to corresponding shares traded on major exchanges like the LSE or NYSE. In 2007 physical gold ETFs represented 800 tonnes of the metal, rising to 3,000 by 2012. Its rapidly rising price, fuelled by the banking, sovereign debt and other crises, drove record inflows.

But these reversed dramatically earlier this year with ETF outflows triggering the sell-off of 150 tonnes in the month of April alone. The WGC has repeatedly said that while ETF demand for physical gold is small relative to other demand, such as that for jewellery, it is highly determinative of price. This is because the supply chain for jewellery is more complex and long, it says.

In today's release the WGC said gold held in gold-backed ETFs fell by just over 400 tonnes, "driven by hedge funds and other speculative investors continuing to exit their positions". This was "predominantly in the US", it added.

Gold funds, of course, have felt the benefits of the rebounding price of bullion.

Research from Hargreaves Lansdown shows the top seven best performing funds in July were all related to gold. Gold funds tend to own shares in gold mining companies, whose shares rose more sharply than the gold price, which gained 9.7pc over the month of July.

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